This Might Be One of the Ugliest Whisky Scams Ever
Three British companies defrauded elderly U.S. residents out of $13 million after promising big returns on investments, per the FBI
[Editor’s note 9/26/2022: A Texas case listed below has been resolved, but not without some back-and-forth between the affiliated parties. The article has been updated to include that information.]
In an uncertain economy, whisky is proving to be a reliable and increasingly lucrative investment. But with good returns come bad actors, including one very bizarre scam that was just broken up by the FBI.
Per Cleveland.com, three companies in England defrauded around 150 people, many elderly, out of $13 million by promising high returns on investments in rare wine and whisky. These companies cold-called their victims in the U.S. and used fake names, British accents — admittedly, because they were probably British — and “aggressive and deceptive tactics” on the calls, promising big gains and high-end parties in Scotland for investments in spirits like 2017 Craigellachie Scotch. One 89-year-old Ohio resident is reportedly out $300,000.
Thankfully, the FBI recently arrested Casey Alexander, who agents said handled the money for the London-based scheme. The companies in question had refused to honor requests to return money to investors, as well as several cease-and-desist letters from state security agencies. A sting operation utilizing a source inside the whisky investment firms and an unidentified man previously convicted of securities fraud (who is now helping the FBI) helped bring down the operation.
As the whisky site Master of Malt notes, ads for whisky investment firms, sketchy or legit, are increasingly showing up in online ads if you’ve exhibited an interest in spirits. And there’s a grey area, too: Last November, the Texas State Securities Board issued an emergency cease-and-desist order to stop an international whisky investment plan from Whiskey & Wealth Club Limited, a firm based in England and Scotland. [Update: The board later withdrew its accusations. The board and the whiskey club have released differing statements that portray the reasoning behind this withdrawal, which you can read here.]
To sort out the bad investment firms from the good, you’ll obviously want to do some internet research (a quick Google search would have shown that Charles Winn, one of the people involved with the English companies in question, had previously been cited by the state of Washington for a fraudulent wine brokerage program). As well, whisky writer Ian Buxton recently compiled a seven-step whisky investment guide, featuring practical advice on avoiding scams (“Make sure you have a Delivery Order”) to an even more prudent suggestion about putting your money in whisky, which he mentions twice: “Don’t.”
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